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Our approach to Consumer Duty

As you’ll be aware, the Financial Conduct Authority’s Consumer Duty sets higher and clearer standards of consumer protection across financial services and requires firms to put their customers’ needs first. Published in July 2022, the Consumer Duty goes further than the Treating Customers Fairly (TCF) framework by requiring FCA regulated firms to ‘act to deliver good customer outcomes’. 

The Consumer Duty rules relate to four outcomes that represent critical elements of the firm to consumer relationship, which are instrumental in helping to drive good outcomes for customers: 

  • Customer Understanding: Customers receive communications they can understand.
  • Products and Services: Customers receive products and services that meet their needs.
  • Consumer Support: Customers get the support they need, when they need it.
  • Price and Value: Customers receive products and services that offer fair value.

What we're doing

At LV= we put the customer at the heart of everything we do and already have well-established frameworks embedded into our business which adhere to existing regulatory requirements, such as the Product Intervention and Product Governance Sourcebook (PROD) and the Insurance Distribution Directive.  

To further support you in meeting the FCA’s Product Governance Sourcebook (PROD) requirements, we provide more detailed information about how we assess Product Value and the outcomes of our Fair Value Assessments. 

Following thorough analysis of the new Consumer Duty requirements, we’ve identified some areas of focus to further improve our approach:

  • We’ve defined what ‘good’ outcomes look like for our customers.
  • We’re putting research in place so that we can review whether our communications are understood by customers.
  • We’re updating our existing reporting mechanisms to make sure that we monitor ‘good’ customer outcomes and drive continuous improvements.
  • We aim to have enhanced communications testing capability by the end of April, after which we’ll start seeking feedback from insurance customers.

    We’ll also have a process in place to ensure we’re able to act upon any feedback appropriately and will start reporting against the new Consumer Duty outcomes from May onwards. The FCA have stated a deadline of 31 July 2023 for firms to adhere to the new Consumer Duty rules and we’re well on track to achieve this. We’ll continue to keep you informed on our approach to Consumer Duty.

    More information

    Full details of the new Consumer Duty can be found via the FCA’s website, as well as information for firms and Consumer Duty podcasts.

    We hope you find this information useful.